{"text":[[{"start":4.8,"text":"Seen from a helicopter above Dallas-Fort Worth, the corporate campuses and factories of companies that have decamped from California and the US north-east stretch to the horizon."}],[{"start":14.16,"text":"This is the landscape of today’s Texas — a Republican state that has gone out of its way to be as business friendly as possible and now boasts more Fortune 500 companies than its Democrat-controlled rivals, with 57 to California’s 56."}],[{"start":28.96,"text":"“Any time you raise a tax or hurt the job creators or put in more regulation, Texas becomes even more attractive,” says Ross Perot Jr, chair of the property developer Hillwood, as well as the US Chamber of Commerce and the Perot Group family office."}],[{"start":43.72,"text":"More than 100 companies have relocated their headquarters to the state since 2020, including Charles Schwab, Tesla and Hewlett Packard Enterprise. Some have also made Texas their corporate domicile as the state overhauls its business code to give more power to management at the expense of shareholders."}],[{"start":62.36,"text":"For many in Texas, rolling out the red carpet for companies, dismantling diversity, equity and inclusion policies and stamping out “extortionist” shareholder suits is part of redressing a power imbalance that holds back growth."}],[{"start":75.8,"text":"They point to the robust health of the state’s economy — which would be the world’s eighth-largest if it were a country — as vindication of their strategy."}],[{"start":null,"text":"

"}],[{"start":82.68,"text":"“The best example we have recently is Elon Musk,” says Perot, the son of the Texas-based billionaire who twice ran for president in the 1990s. “Why did Elon leave California right in the middle of Covid? They’re shutting down his factories and he came to Texas and we’re wide open.”"}],[{"start":99.56,"text":"Not content with moving Tesla to Austin in 2021, Musk incorporated SpaceX in Texas after a Delaware trial court ruled against his $56bn pay package in 2024."}],[{"start":111.8,"text":"The state has diversified its corporate base far beyond its energy roots, seeking to rival California in tech and New York in financial services. Its burgeoning power is increasingly shaping America’s corporate landscape."}],[{"start":124.28,"text":"More data centre capacity is under construction in Texas than any other state in the US, according to Wood Mackenzie. JPMorgan now has more employees in the state than it does in New York."}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":134.26,"text":"While proponents see the state as a model for the US as a whole — and a laboratory for pro-business ideas — its approach is being tested by a growing backlash against the data centres, and midterm elections in which the Democrats are threatening the Republicans’ hold on a long-safe Senate seat."}],[{"start":150.44,"text":"In a state where checks on capitalism have been systematically eroded over the years, Big Tech has much at stake in November’s vote — as does business as a whole."}],[{"start":161.28,"text":"‘Capitalism on steroids’"}],[{"start":162.84,"text":"If there was a moment when Texas started forging its own path as a corporate jurisdiction, it was when George W Bush triumphed in the 1994 race for governor — since when no Democrat has won a statewide election for public office."}],[{"start":176.1,"text":"The future president embraced tort reform, changing rules around frivolous lawsuits and damages. The state subsequently introduced a Texas Business Court in 2023 to speed up commercial litigation and, last year, a sweeping capital markets package that includes a revised “business judgment rule” to set a higher bar for plaintiffs challenging internal corporate actions."}],[{"start":198.42,"text":"It is a system that Christina Sautter, a law professor at Dallas’s Southern Methodist University, describes as “capitalism on steroids”, with statutes that are now “much more pro-management and anti-shareholder” and “a systemic risk across the board because companies are so powerful”."}],[{"start":215.28,"text":"But Elaine Agather, global vice-chair at JPMorgan Bank in Dallas, says the legal landscape has given businesses predictability and stability."}],[{"start":224.16,"text":"As companies have relocated and prospered, with Texas vying for the Fortune 500 crown with California and New York throughout this century, financial services firms have followed."}],[{"start":null,"text":""}],[{"start":234.48,"text":"The Dallas-Fort Worth financial hub — popularly known as Y’all Street — is stepping up its bid to take on New York, even as Austin attracts tech investments and Houston builds on its longstanding position as an international energy capital."}],[{"start":248.44,"text":"“There was always a joke about you can’t start in Dallas [because of the region’s relatively undeveloped capital markets] . . . you need to go to New York,” says Agather, who in addition to her role at JPMorgan is the first female board member at the Fort Worth Stock Show and Rodeo. “That’s not the case any more.”"}],[{"start":262.52,"text":"She predicts that in a decade’s time Dallas will be known for “barbecue and capital markets”, noting that JPMorgan’s private banking team in the state has increased by more than half in four years."}],[{"start":273.3,"text":"The New York Stock Exchange opened a regional headquarters in Dallas last month to take on the upstart Texas Stock Exchange, while Goldman Sachs is building an 800,000 sq ft campus close to JPMorgan’s outpost."}],[{"start":286.44,"text":"“Y’all Street represents Texas emerging as a financial capital formation centre,” says Rachel Racz, president of Nasdaq Texas, who adds that companies are jostling to capture a piece of the region’s growing wealth."}],[{"start":null,"text":""}],[{"start":298.76,"text":"Meanwhile Austin has morphed over the decades from a sleepy university town into a hotbed of technology companies such as Tesla, Dell Technologies and Firefly Aerospace, a space and defence company that partners with Nasa."}],[{"start":312.24,"text":"And while Dallas has been the destination for many recent corporate relocations, it is Houston that boasts Texas’s biggest number of Fortune 500 companies — the groups with the highest revenues in the country."}],[{"start":324.04,"text":"Texas provides about 25 per cent of the country’s domestically produced primary energy — a category that includes everything from coal, unrefined oil and natural gas to wind and solar. That is more than any other state, according to the US Energy Information Administration. Despite its fame as a hydrocarbon state, Texas is first in the nation in wind-generated electricity and among the leaders in solar energy potential and generation."}],[{"start":349.6,"text":"“Texas is offering something that is increasingly scarce, the ability to deploy enormous amounts of capital, energy and physical infrastructure at scale in a large and growing market,” says Danny David, managing partner at Baker Botts law firm who serves on the executive committee of the Greater Houston Partnership, an economic development group for the metropolitan region."}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":370.2,"text":"It is a record that has helped Texas to economic growth that is the envy of its rivals. Last year’s rate of 2.5 per cent took state GDP to $2.9tn, which Governor Greg Abbott noted was a real-terms increase of almost 50 per cent from when he took office in 2015."}],[{"start":387.9,"text":"Job and population growth have also both outpaced US averages for decades, in what local politicians describe as the Texas miracle."}],[{"start":395.52,"text":"In other areas, the state performs poorly. There is little by way of a safety net. Texas has the highest percentage of any state of residents without health insurance and its share of families in poverty exceeds the national average."}],[{"start":409.48,"text":"Pia Orrenius, labour economist at the Federal Reserve Bank of Dallas, notes that because job creation has stalled and inflation is high, personal income is “growing very slowly in Texas”."}],[{"start":421.1,"text":"“One big headwind will be: ‘How do we keep the expansion going with lagging real income growth?’” she adds."}],[{"start":428.2,"text":"The biggest bet to do so is the data centres that are now top of the state’s economic and political agenda."}],[{"start":428.7,"text":"The data centre election"}],[{"start":432.48,"text":"Texas’s vast energy reserves, cheap land and political will put it at the heart of the AI build-out in the US. The state has been a chief beneficiary of US companies reshoring manufacturing, with Asian chipmakers such as Samsung and Wistron also setting up factories in the state."}],[{"start":453.04,"text":"Abbott declared last year that the state would be at the “epicentre of AI development”. But with state authorities now considering over 474 gigawatts of requests to connect to the Texas grid, more than five times its record peak electricity demand, voters are concerned about the implications for water consumption and the reliability of the power network."}],[{"start":null,"text":""}],[{"start":473.28,"text":"The controversy is overshadowing the midterm elections, in which the Democrat James Talarico has established a slim lead over his scandal-ridden Republican rival Ken Paxton for the vacant Senate seat, according to an average of recent polls."}],[{"start":487.96,"text":"President Donald Trump’s unpopularity is expected to help Democrats take control of the House of Representatives in November, but the loss of the Senate seat would be a stinging rebuke for a state that has up until now been reliably red."}],[{"start":501.28,"text":"Democrats are gaining momentum by calling for an immediate moratorium on data centre construction, while rural voters, usually a Republican bulwark, are divided on the issue."}],[{"start":510.84,"text":"“It’s unusual to see this kind of pushback coming not just from Democrats but also from Republicans,” said Joshua Blank, a political analyst at the University of Texas at Austin. “This is about access to resources, stewardship of the state and ultimately the fairness of the economy.”"}],[{"start":525.6,"text":"He notes the money pouring into Texas to influence the election and the data centre debate."}],[{"start":531.52,"text":"American Mission, an affiliate of Leading the Future, a political action committee that has raised more than $75mn from Silicon Valley billionaires, has been advancing a pro-AI platform in the run-up to the midterms."}],[{"start":544.08,"text":"Despite the funds being spent on promoting candidates sympathetic to the cause, the pushback has been marked."}],[{"start":550.04,"text":"Recent polling by the Texas Politics Project at the University of Texas indicates that more than 50 per cent of people in the state oppose data centres in their communities."}],[{"start":559.28,"text":"Abbott said late last month that he had “pressed pause on any new data centre being able to join the operations in the state of Texas” after ordering an audit on projects in the queue for approval."}],[{"start":570.04,"text":"Analysts say the move falls far short of a full moratorium because the governor’s approval is not necessary for all projects, but his comments are an apparent signal of the limits of Texas’s pro-business approach."}],[{"start":581.8,"text":"Abbott has also said he will work with the Texas legislature to require data centres to pay for their own electricity infrastructure and use water-efficient technology — as well as repealing sales tax exemptions."}],[{"start":593.72,"text":"Michael Levy, chief executive of Crow Holdings, a private real estate investment and development company based in Dallas, argues that a course correction is only natural."}],[{"start":602.64,"text":"“America for 50 years did everything it can to move every single manufacturing facility offshore,” he says. “Now we are reindustrialising in the country and big things are being built and that’s startling to people.”"}],[{"start":615.56,"text":"David at Baker Botts adds that the data centre backlash reflects “the growing pains of the state looking to develop a rule book where none had previously existed”."}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":624.32,"text":"He adds: “I don’t think this is a passport to unfettered, unchecked corporate activity.”"}],[{"start":629.24,"text":"But critics see a broader pattern of excessive inducements to industry, as highlighted by Musk’s relationship with Texas over the years."}],[{"start":636.88,"text":"In 2013, when SpaceX was deliberating where to put its rocket launch site, Texas changed the law to restrict public access on Boca Chica Beach outside Brownsville, part of the Lower Rio Grande Valley National Wildlife Refuge, and to facilitate “space flight activities”."}],[{"start":653.52,"text":"After Musk chose Boca Chica a year later, Texas appropriated $15mn for a Spaceport Trust Fund, among other incentives, that went to SpaceX."}],[{"start":663.04,"text":"This year, Grimes County, an hour’s drive outside Houston, approved a 100 per cent property tax abatement for Musk’s $55bn Terafab chip fabrication plant. Instead, SpaceX will pay the county $20mn a year, which it said was 78 per cent of what the county would have received from property taxes. Some activists describe this as a flawed process that failed to take account of local ranchers’ and landowners’ concerns."}],[{"start":689.14,"text":"Texas’s ideological stance — and its embrace of Trump’s Maga values, which included a 2022 ban on almost all abortions — is also part of the wider context, something critics say may deter companies from relocating."}],[{"start":702.08,"text":"“The big thing that Texas has done, coupled with the loosening of shareholder rights, is this anti-woke conservative agenda,” says Ann Lipton, law professor at the University of Colorado Boulder."}],[{"start":713,"text":"“There is a signal they [companies] send, that by incorporating in Texas you’re saying something about the political values of the organisation,” she adds."}],[{"start":721.8,"text":"“Companies that are afraid for any kind of marketing reason, such as wanting to appeal to a more liberal audience, may find Texas to be an unattractive home . . . I don’t know that Disney wants to be incorporated in Texas.”"}],[{"start":733.48,"text":"Ingrid Robinson, chief executive and president of the Houston Minority Supplier Development Council, a non-profit linking corporations and minority business enterprises, also says Texas’s war on woke is damaging business in the state."}],[{"start":747.6,"text":"She cites the state administration’s efforts to refocus a programme to give procurement opportunities to women, minorities and disabled veterans on just the last group."}],[{"start":756.68,"text":"“People move to Texas because there is a lot of opportunity, it’s a business-friendly state,” she says. “Now you’re feeling a sense that those opportunities are no longer available.”"}],[{"start":766.72,"text":"Right now, however, there is little sign that Texas’s drawing power on the nation’s businesses has begun to wane. Advocates of the state’s way of business still argue that the future — a low-tax, low-regulation one — is on their side."}],[{"start":779.52,"text":"Back in Dallas-Fort Worth, Perot is hopeful of a resolution to the data centre impasse where “everybody wins” and urges the state to seize the moment on AI — as it has done in burnishing its business credentials over the past three decades."}],[{"start":794.76,"text":"“Figure out a way to do it responsibly, but do not miss the boat,” he says of the drive to bring more data centres to Texas than any other state. “They’re not going to come back for round two.”"}],[{"start":806.2,"text":"Cartography by Steven Bernard. Data visualisation by Keith Fray"}],[{"start":811.06,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1788754933_1666.mp3"}